CR 04 07–INSIDE THE PREMISES–ROBBERY OF A CUSTODIAN OR SAFE BURGLARY OF MONEY AND SECURITIES

(July 2019)

INTRODUCTION

This endorsement should be used when the broader coverage that Insuring Agreement 3–Inside the Premises–Theft of Money and Securities offers is either not available or provides more coverage than the insured wants to purchase.

Note: Custodian means the named insured, partners, members, and employees who have control of the property. It does not include persons who perform the duties of either a janitor or a watchperson.

This analysis is of the 08 13 edition. Changes from the 08 07 edition are in bold print.

ELIGIBILITY

This coverage can be added to any Insurance Services Office (ISO) Commercial Crime or Government Crime Coverage Form or Policy.

LIMIT AND DEDUCTIBLE

The limit and deductible must be entered on the declarations next to the description of this insuring agreement.

ANALYSIS

This is an endorsement to the ISO Commercial Crime or Government Crime Coverage Forms and Policies and is subject to their conditions, definitions, and exclusions. The only changes are those within the endorsement.

A. Insuring Agreement

This insuring agreement has three separate parts:

1. There is coverage for the loss of money and securities but only if a custodian is robbed inside the premises or a safe inside the insured premises or inside the financial institution (was “banking” in the 08 07 edition) premises is burglarized.

Example: Nancy is working late when she hears someone enter the premises. The intruder orders her to hand over the day’s receipts. Nancy complies and the intruder leaves. The loss of money and securities is covered because Nancy was acting as a custodian at the time and was on premises when the loss occurred.

2. There is coverage for property damage to the exterior and interior of the premises that results from actual or attempted robbery or safe burglary. However, coverage applies only if the named insured owns the premises or is legally liable for the damage.

3. There is coverage for damage to the safe or vault at the location as a direct result of actual or attempted safe burglary. This coverage applies ONLY if the safe or vault was locked.

Example: Burglars break into Joey’s store and head straight for the safe. They are prepared to break into the safe but discover that the safe door had been left ajar. The burglars take all items within the safe. Joey turns in a claim but when the investigation reveals that the safe had not been locked at the time of the loss, the claim is denied.

B. Exclusions (08 13 changes)

The exclusions in the ISO Commercial Crime or Government Crime Coverage Forms and Policies that apply to all Insuring Agreements apply to this endorsement. It is important to note that the exclusions that apply specifically to Insuring Agreement 3, Inside the Premises–Theft of Money and Securities do not apply to this insuring agreement. However, the following nine exclusions are specific to this insuring agreement:

1. Fire damage is excluded but there are two exceptions. Fire damage to money and securities is covered and fire damage to a vault or safe is covered.

2. There is no coverage for loss of or damage to property that is given away to someone outside the premises or financial institution (was “banking” in the 08 07 edition) premises because of unauthorized instructions or various types of threats.

The threat could be to take any of the following or similar actions:

Bodily harm to a person
Damage any property
Place a denial of service attack into any computer system
Place any type of malicious instruction, such as a virus, into any computer system in order to destroy, damage, or corrupt computer programs or electronic data that is a part of the computer system.
Damage the named insured’s services or products by contaminating or polluting them or in some other way causing them to become less than acceptable.
Damaging the named insured’s services or products by contaminating or polluting them or in some other way causing them to become less than acceptable. Any of the following would be used, released, or given to others :

o Confidential or proprietary information that belongs to the named insured

o Confidential or personal information that belongs to a person or organization that is not the named insured (08 13 addition)

o Weaknesses that are part of the source code that is part of any (was “the named insured’s” in the
08 07 edition) computer system

Note: Losses due to unauthorized instructions are very difficult to insure. However, threat coverage is available under CR 04 03–Extortion-Commercial Entities, CR 04 04–Extortion-Government Entities, or CR 00 40–Kidnap/Ransom and Extortion Coverage Form.

CR 04 03–Extortion–Commercial Entities and CR 04 04–Extortion–Government Entities

CR 00 40–Kidnap/Ransom and Extortion Coverage Form and CR 00 41–Kidnap/Ransom and Extortion Policy

3. There is no coverage for any vandalism damage to the covered other property, the premises or to the exterior of the premises. Malicious mischief damage is also not covered.

Note: This exclusion does not refer to money and securities. As a result, coverage for money and securities due to vandalism and malicious mischief could be covered. This is important because the commercial property coverage forms to not provide any coverage for money and securities.